EUR/NZD Big Trade 03.09.2016 – Stopped

The next 2 monetary policy announcements will be from the RBNZ followed by the ECB. Given the recent improvements in NZ data we don’t see any chance of a RBNZ rate cut. While average hourly earnings are lower, house prices fell, consumer and business confidence declined, there’s enough improvement for the Reserve Bank to keep interest rates unchanged. The RBNZ may leave the door open to additional easing but the recent rise in AUD/NZD also reduces the pressure to ease. At the same time, we expect euro to drift lower again pre-ECB.